Brazil’s BTG Pactual announced on its blog, January 21, 2019, that it was adding a new security token to its portfolio. With this move, the bank becomes the latest financial institution in the country to add crypto assets to its financial instrument roster.
According to the official blog post, Banco BTG Pactual SA, is the biggest Latin America’s standalone investment bank who is now joining the crypto-assets space by adding a new security token to its financial instruments.
The CEO of BTG Pactual, Roberto Sallouti commented:
“The technology associated with this offering allows us to be a pioneer in providing access to assets classes that have historically been difficult for global retail investors to access. We are constantly exploring innovative ways to promote, democratize and encourage the development of financial and capital markets.”
ReitBZ (RBZ) is the new security token that the bank will be making available to its clients. RBZ is a blockchain-based technology security token that grants the owners access to the distressed real estate market in the country.
Security Token offering
To support the launch of the token, the bank is planning to gain around $15 million of funding in an security token offering (STO) for ReitBZ. The token was designed as security backed by real estate assets in the country and is the product of a cooperation between BTG Pactual and Enforce, a leading manager of distressed Brazilian assets.
The STO will enable investors anywhere in the world to access these new security tokens that essentially represent a direct investment into the distressed real estate properties in the country based on a tax-efficient and low-cost structure. Depending on the performance of the portfolio, investors will receive periodic profits via token distribution.
André Portilho, project leader at BTG Pactual stressed:
“We believe this is an ideal time to invest in the Brazilian real estate sector. In our view, we are in the early stages of price recovery and our investment thesis is supported by the country’s positive economic and regulatory outlook.”
The security Token industry
ReitBZ’s tokens will be connected to a portfolio constituted with urban properties located in the states of Rio de Janeiro and São Paulo. The properties targeted are properties that were discarded during the country’s economic recession and now offer an enormous profit potential triggered by the economic upside turn.
BTG Pactual also partnered with the Gemini Trust Company, LLC (Gemini), to start making use of the Gemini dollar, a U.S. dollar-backed stablecoin, that will enable the company to procure investment and distribute dividends using the Ethereum blockchain.
The CEO of Gemini, Tyler Winklevoss commented on the partnership:
“The tokenization of real assets is a major step forward in the evolution of the crypto economy. We’re proud to have created the Gemini dollar to enable eligible investors to access institutional products on the blockchain without the price volatility associated with traditional cryptocurrency. Working with BTG Pactual to leverage the Gemini dollar as the stablecoin for ReitBZ helps move the industry in the right direction.”
The security token industry is growing much like the ICO market had previously grown, but contrary to ICOs, the security token industry is far more regulated than ever before.
“Gemini was the preferred choice of stablecoin issuers given its highly regulated and compliant approach to the market, combined with the creditworthiness and price stability of the U.S. dollar.”